Former Barnett trust to unveil £1bn merger with Murray Income

July 28, 2020

An investment trust managed by one of the City's best-known stock-pickers for more than two decades is close to unveiling a £1bn merger with a listed rival as it seeks to reverse its faltering performance.

Sky News has learnt that the Perpetual Income and Growth Investment Trust (PIGIT), which was overseen by the Invesco equities chief Mark Barnett, could announce within days that it is to combine with the Murray Income Trust (MIT).

The deal, which will create a new vehicle with approximately £1bn of assets, will come nearly four months since PIGIT said it was removing Invesco from the mandate after nearly a quarter of a century.

The trust's board had become frustrated with a protracted period of underperformance which had seen its assets shrink in value.

Mr Barnett left Invesco just weeks later.

Sources said on Tuesday evening that if completed, the deal would result in PIGIT's assets being transferred to MIT, with the former trust then facing dissolution.

Shareholders in both companies are expected to vote on the transaction.

One person close to MIT, which is managed by Aberdeen Standard Investments (ASI), said PIGIT's investors stood to benefit from greater liquidity, lower charges and the oversight of Charles Luke, a senior ASI executive.

The switch in manager will come after months of stock market chaos caused by the coronavirus outbreak's impact on the balance sheets of hundreds of listed companies, with many tapping shareholders for fresh equity to survive.

Investors have also been hurt by the fact that funds geared towards stocks which historically paid handsome dividends have faced a deluge of companies abandoning their payouts.

PIGIT declined to comment, while ASI could not be reached.

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